The U.S. Department of the Treasury and IRS released Notice 2026-28, clarifying the employer credit for paid family and medical leave (PFML) under the Working Families Tax Cuts (WFTC). The guidance makes PFML benefits permanent, expanding eligibility and coverage for employers. Key changes include allowing credits for employees with six months of service and part-time workers working 20+ hours weekly. Employers may now claim credits for insurance premiums or wages paid during leave, with state/local mandates counted toward eligibility but not credit calculations. Beginning in 2026, employers can claim credits for PFML insurance premiums and wages, with guidance comparing premium and wage-based methods. Proposed regulations will provide further clarity. The WFTC aims to incentivize businesses to offer up to 12 weeks of paid leave for family or medical needs, with tax credits ranging from 12.5% to 25% of qualifying wages.
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